EX-12 6 y25965exv12.htm EX-12: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EX-12
 

Exhibit 12
SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
(Dollars in millions)
                                                 
    Nine Months        
    Ended        
    September 30,     Years Ended December 31  
    2006     2005     2004     2003     2002     2001  
Income/(loss) before income taxes
   $ 1,193     $ 497     $ (168 )   $ (46 )   $ 2,563     $ 2,523  
Less: Equity income
     1,056       873       347       54       —       —  
 
                                    
Income/(loss) before income taxes and equity income
     137       (376 )     (515 )     (100 )     2,563       2,523  
Add: Fixed charges:
                                                
Preference dividends
     65       86       34       —       —       —  
Interest expense
     131       163       168       81       28       40  
One-third of rental expense
     29       37       30       30       27       24  
Capitalized interest
     11       14       20       11       24       25  
 
                                    
Total fixed charges
     236       300       252       122       79       89  
Less: Capitalized interest
     11       14       20       11       24       25  
Less: Preference dividends
     65       86       34       —       —       —  
Add: Amortization of capitalized interest
     8       10       9       9       8       7  
Add: Distributed income of equity investees
     822       647       228       32       —       —  
 
                                    
Earnings/(loss) before income taxes and fixed charges (other than capitalized interest)
   $ 1,127     $ 481     $ (80 )   $ 52     $ 2,626     $ 2,594  
 
                                    
Ratio of earnings to fixed charges
     4.8       1.6       (0.3) *     0.4 **     33.2       29.1  
 
                                    
 
*   For the year ended December 31, 2004, earnings were insufficient to cover fixed charges by $332 million.
 
**   For the year ended December 31, 2003, earnings were insufficient to cover fixed charges by $70 million.
“Earnings” consist of income/(loss) before income taxes and equity income, plus fixed charges (other than capitalized interest and preference dividends), amortization of capitalized interest and distributed income of equity investee. “Fixed charges” consist of interest expense, capitalized interest, preference dividends and one-third of rentals which Schering-Plough believes to be a reasonable estimate of an interest factor on leases.